WHAT would you think if I told you that 2004’s federal budget deficit was really $615 billion, which is about 30 percent bigger than you’ve read in the newspapers?

Now, what would you think if the Secretary of the U.S. Treasury told you this?

After you look at the government numbers I will present at the end of this column you’ll see that President Bush is absolutely correct in saying that the Social Security system’s finances need to be reformed immediately – although I disagree that privatization is the solution.

Two weeks ago, the U.S. Treasury posted on its Web site a financial statement for the country that was compiled in the same way companies are required to keep their books.

The Web address alone should provide some hint as to how inaccessible this information is.

And, as best I can see, the Treasury didn’t issue any big press release publicizing this information.

But don’t think the government is suddenly becoming forthcoming with information. This fiscal report, using Generally Accepted Accounting Principles (or GAAP), is now required by law.

The news was slipped out just before the holiday season and the release date was at least three months ahead of schedule.

In the journalism business these are all signs that someone doesn’t want the public to know something. So, just what could that something be?

I’ll let John Snow tell you in his own words, contained in report’s prelude that is titled “A Message from the Secretary of the Treasury.”

“In the fiscal year 2004, government revenues were $1.9 trillion . . . The net cost of the government’s operations was $2.5 trillion . . . Total revenues less operating costs resulted in a net operating cost of slightly more than $615 billion,” Snow states. I took some words out to make it understandable. Now, allow me to translate: the government ran a deficit of $615 billion.

In the missing parts, the Treasury Secretary correctly said that this was an improvement from the $668 billion deficit that the government ran in 2003. He correctly added that this was the first gain in revenue in four years.

Notice that Snow took great pains to avoid using the term “deficit.” But even a kid with a paper route understands that when the “net operating cost” – as the Treasury Secretary calls it – exceeds revenues, that’s the definition of a deficit.

You can be forgiven if you thought that Washington’s budget deficit was “just” $412 billion in the last fiscal year because that’s the number the government puts out in the big press release. And that’s the figure that the media plays up.

How can there be a $203 billion discrepancy in the numbers?

It mostly has to do with Social Security costs and cash vs. accrual accounting. The $203 billion gap (between the $615 billion “net operating cost” and Washington’s officially publicized $412 billion budget deficit) is the amount of Social Security money that the government collected and used for its everyday operations.

If you are looking at Snow’s statement, turn to the table on page 11, entitled “Overall Perspective.”

Look at the last line called Total Assets minus Total Liabilities & Net Responsibilities. The liabilities grew to $45.9 trillion at the end of 2004, compared with liabilities of $34.8 trillion at the end of the previous year.

In other words, what the accountants call the net present cost of unfunded future obligations grew by a massive $11.1 trillion in just the past year. That’s why Social Security as well as Medicare needs to be fixed – NOW.